The Study Of The Appropriate Technology Selection In Backward Countries And Its Role In Economic Growth

Evolution of the world technology shows that developed countries tend to improve the technical level through independent innovation; backward countries are largely dependent on the introduction and imitation of frontier technology to make technological progress. However, it is worth pondering that whether the cutting-edge technology based on the factor endowment of developed countries is appropriate for backward countries. China is to stride forward towards the phase of “new normal”, in the background of the economic growth transition, gradually from high speed to speed around 6.5%-7%, how to complete the factor-driven to innovation-driven transformation is one of the current major challenges. How to enhance the appropriateness of factor structure and technology selection, improve the quantity and quality of economic growth is an important part of the current “supply side” reforms.For this purpose, this paper chooses the appropriate technology selection in backward countries and its role in the economic growth as research topic. Firstly, this paper summarizes the theory and literature frontier on the appropriate technology selection, and then explores the mechanism of appropriate technology selection in backward countries with different factor structure, using the technology frontier. And then I introduce the product-variety model to deduce the mechanism of appropriate technology selection in backward countries and its role in the economic growth. Finally in the model of technical change with quality improvements, I deduce the technological transition path from technology introduction to independent innovation, constrained by the different technological gap, and the convergence mechanism to the world technology frontier. On this basis, this paper focuses on the history of technical change in countries with different factor structure, to explore the successful experience of appropriate technology selection and technology catching-up in backward countries or regions after the industrial revolution.From the double perspective of capital and labor structure, skilled and unskilled labor structure, this paper examines appropriateness of technology selection in backward countries, comparing developed countries as control. And then, this paper estimates the output of frontier technology, horizontal comparing the economic growth of backward countries and developed countries under different technology absorption barriers when introducing advanced technology from the United States; then measures the output of technology introduction in backward countries, and vertically contrasts the economic growth in these countries when selecting technology from different countries. Based on this, I discriminate the appropriate technology at different stage, and estimate the appropriate technology range. Finally, using the endogenous model of quality improvements with technology introduction and innovation, this paper simulates technical change path and technology catching-up based on the data of China, finds the optimal way of technology transformation for backward countries. The major studies of this paper are as follows:First, this paper establishes a model based on the innovation of expanding variety of intermediate product, and deduces the endogenous mechanism of factor-augmenting technology selection in backward countries and its effect on economic growth. I introduce knowledge-based innovation possibilities frontier in form of CES, and regard the scientists as R&D resources. I explore a two-stage allocation of R&D resources from research firm and its impact on the technology selction, and reveal the effect of appropriate selection on economic growth from the perspective of the supply side of innovations. The results show that: appropriate technology selection in backward countries is the function of its independent innovation efficiency coefficient, factor intensity in backward countries and developed countries. On the one hand, factor structure in backward countries affects the appropriate technology selection by influencing values of different factor-augmenting technology. On the other hand, it cooperate with the factor structure in developed countries affecting technology selection and reallocating R&D resources between research firm of two factor-complementary machine, and independent innovation and technology introduction, which has a role in technology selection in backward countries and the its economic growth.Second, using the technology frontier, this paper analyzes the mechanism of appropriate technology selection in backward countries with different factor structure, from productivity and factor technical efficiency to evaluate the appropriateness of factor structure and technology, and balancing independent innovation and technology introduction. Focusing on the technology evolution of countries (regions) with different factor structure, I explore the experience of appropriate technology selection in backward countries and regions since the industrial revolution with different factor structure such as USA, Germany and Japan and the Asian tigers. And then, I review the natural experiment of technology pattern conversion in silk industry in Modern China, contrast the appropriateness of technology selection in Hangzhou, Shanghai and Nanjing with different factor endowment structure and its role in technology upgrade of silk industry, to examine the mechanisam of appropriate technology selection in backward countries (regions) above.Third, this paper establishes the evaluation index system of appropriateness of technological selection with capital and labor structure, estimates the elasticity of factor substitution using the normalized three-equation system and SUR model, and calculates factor technical efficiency and biased technical progress index in backward countries, and regards developed countries as control to evaluate the appropriateness of technology selection in backward countries. Using the index of frontier technology output, this paper horizontal compares the economic growth of developed countries and backward countries when importing the US frontier technology under different technology absorptive barriers. Based on this, this paper estimates the index of technology introduction output, and vertically compares the economic growth in backward countries when introducing and absorbing technology from different countries, and finds that there is a threshold of factor intensity and technical level when backward countries making appropriate technology choices. And backward countries could discriminate the appropriate technology to import and imitation and obtain great output growth, by judging whether the factor structure of capital to labor and technical level in technology-exporting country is just at the threshold range.Fourth, this paper estimates the skilled labor and unskilled labor technical efficiency, to examine the appropriateness of the technology selection in backward countries, regarding developed countries as control. And I find that: the backward countries select technology that is most suited to its labor endowment and use skilled labor less efficiently than developed countries, and use unskilled labor more efficiently than developed countries. Based on this, I estimate the appropriate technology output that shows an inverse relationship with the country's initial GDP, which implies that backward countries to fully absorb and transform the cutting edge technology in accordance with their labor endowment can obtain boost output increase. This paper decomposes the improvement in output per worker into technological change effect and appropriate technology selection effect, and contrasts the contribution of appropriate technology selection and technological change to economic growth.Fifth, this paper constructs a model of technical change with quality improvements with introduction of two main ways to technology upgrade including technology introduction and independent innovation. The technology firm allocates the R&D spending to choose technology in response to expected profits, and there are step size and flow rate of innovation two major forces affecting expected profits, deducing the endogenous mechanism of technical change path. I use the China data to simulate the path of technological transition and the process of technology catch-up in backward countries, find that: the effects of different types of innovative step size on path of technical change show non-consistency, step size of independent innovation shows level and growth effect on the growth rate of innovation, while that of imitation innovation only shows level effect. The key to innovation-driven economic growth lies in innovation.The roles of independent innovation and imitative innovation step size in technological progress do not show a single positive feature, but showing a nonlinear threshold effect. When the ratio of innovation to imitation innovation step size is beyond the threshold value, technical level begins to increase steadily. Thus, only identified the desirable ratio of independent innovation and imitative innovation of step, could backward countries achieve the technology transformation of appropriate technology.